Unemployment Numbers Up Due to Mergers Like American Airlines and US Airways

Although we would expect to see a new look airline also look for unemployment numbers to increase due to the merger of American Airlines and USA Airways due to several factors.

Expectations are that there will be no problem getting the merger approved by the US Department of Justice and we will see a new mega airline emerge but also expect top see some negative aspects as well. A few of those aspects will affect jobs and in this economy losing more jobs due to a mega merger or for anything else really is not a positive for the economy and will certainly have an effect on the unemployment numbers over the long haul. For starters expect to see less cities services as the business gets looked at hard by the bean counters. Cities that do not generate a certain profit margin from routes that are not used optimally could and will be cut out and eliminated from daily flights.

The loss of services will not only affect millions of passengers but also will affect the employees of the airlines as many will be laid off or put on a part time status basis due to a lack of work. Those higher than average paying jobs will not show up big in the unemployment numbers directly but they will show up in the appliance stores and car dealerships as well as the restaurants and the department stores. Smaller shops that catered to that demographic will feel the pinch as well since the loss of airline jobs will affect a lot of ancillary occupations as well. Entire towns and cities could be affected as those in the industry typically cluster together in neighborhoods.

Consolidation does not always bring all peaches and cream and we may see some other negative repercussions. Over 1500 airports expect to lose at least one of the airlines which hardly translates into a better situation service and employment wise.

So be careful before you applaud a large merger like the one with American airlines and US Airways as there is more that affects the consumer than what meets the eye and unemployment numbers could be in that mix.